INTRODUCTIONThis chapter identifies the main external influences on the UK market for private security and fire protection, using the four headings of a PEST analysis: political, economic, social and technological.

Where such influences have more than one dimension, they are considered under the heading that is considered to be the most relevant. POLITICAL FACTORS
The Terrorist ThreatPrecautions against terrorist attacks have been stepped up since the events of 11th September 2001, and there is strong demand for security services and equipment in the public sector. The UK, and especially London, has been on a high level of alert since the war in Iraq. Some of the UK's export customers are also concerned about the threat from terrorism. Airport Security

In the important airport and airline security sector, the effects of terrorism have been mixed. In the US, the Federal Government took over all passenger screening from the private security industry, and it plans to retain direct control until 2005. Because UK firms play an important role in airport security, this meant the loss of an important customer sector. In the UK, the Department for Transport (DfT) took over the approval of companies providing airport security, but it left the work in the private sector. Around the world, heightened awareness of the need for airport security has been a positive driver for the private security industry. There are still many airports where security needs to be improved.

Regulation of the Security IndustryAfter at least 8 years of discussion, compulsory regulation of the security industry has begun in England and Wales. It will take some time to extend registration to all regions and all the security activities that need to be covered, but the result should be improved standards and improved customer confidence in the manned security sector. However, the increase in labour costs caused by regulation is likely to eliminate some of the lower-cost services and raise the prices of others.

The Scottish security industry is in favour of similar legislation for Scotland, but it will take some time for this to go through the Scottish Parliament and for a scheme to be set up.
The Expanded EUThe expansion of the EU should assist the development of the Union's new members and lead to growth in construction work in these countries, which will in turn produce demand for security products. UK manufacturers are already facing growing competition from manufacturers in Eastern Europe, but the opportunities for exports are also improving.

EU Legislation on ServicesIn July 2004, the Chairman of the British Security Industry Association (BSIA), David Dickens, expressed concern about a proposed European Directive on Services in the Internal Market. This Directive would allow EU nationals to market their services in the UK while complying only with the regulations that apply in their home countries, regardless of any additional rules that may exist in the UK. The Directive would cover a very wide range of services, including security services.

Mr Dickens pointed out that the legislation could cause abuses of competition in the private security industry and would encourage providers of security services to set up their operations in the country with the lowest requirements. Anyone seeking to establish a private security business in the UK would need to obtain authorisation, yet a firm could be set up elsewhere without authorisation and still operate in the UK market. The BSIA wants the security industry to be exempted from any such legislation.

Congestion ChargingThe introduction of the Central London Congestion Charge led to an increase in the cost of Central London cash-collection services in 2003/2004. Any decision to copy the scheme in other large cities would have a similar effect. Neighbourhood Wardens and Street Wardens

Neighbourhood Wardens or Street Wardens have been introduced in many areas of Great Britain, and there is...

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